Trump administration eyes allowing Medicare to negotiate more drug prices

By | October 25, 2018

The U.S. pays 180 percent more than other countries for most of the drugs that are given to Medicare patients while they’re with a doctor, according to a report out Thursday from the Department of Health and Human Services.

The timing of the report suggests that it will factor into President Trump’s speech on drug pricing scheduled for later in the day. The Trump administration has already called for allowing Medicare Part B to negotiate drug prices.

“We can and must do better,” HHS Secretary Alex Azar tweeted Thursday morning. “I look forward to hearing from later today on the administration’s efforts to address the high cost of prescription drugs, and our work to put American patients first.”

A plan to allow the Part B portion of Medicare to negotiate prices would bring prices more in line with what people pay for treatments when they are covered by private health insurance. The Medicare program covers people over the age of 65 as well as certain people with disabilities. HHS Secretary Alex Azar estimated on Twitter that allowing drug companies to negotiate would lower prices by $ 8.1 billion.

Drugs that are sold at the pharmacy to Medicare beneficiaries, who take them on their own, already are negotiated by insurers and middlemen known as pharmacy benefits managers. In Part B, however, drug companies do not typically negotiate. They pay full price for treatment as well as as a doctor fee.

The types of treatments people get at the doctor’s office or in a hospital include infusions to treat pain or muscular degeneration, chemotherapy, and treatments for multiple sclerosis. The cost of the treatments is paid for by the government and also by patients.

The HHS report looked at 27 different drugs, accounting for $ 17 billion in spending, the bulk of what Part B spends on drugs. It found that in some cases the U.S. pays 400 percent more that other countries on average. The U.S. paid less than other countries for only one treatment, one that is used to treat an immune deficiency.

Some of the highest priced drugs included Lucentis, a drug used to treat diabetes, and Aranesp, a bone marrow stimulant.

“These higher prices mean that Medicare pays nearly TWICE as much as it would for the same or similar drugs in other countries,” Azar tweeted.

The proposal to Medicare Part B fits into the president’s rhetoric on drug prices. Trump had suggested when he was running for office that Medicare should be allowed to negotiate drug prices, typically a Democratic promise, but he has since backed off. Trump also has said that he believes the rest of the world benefits from the fact that the U.S. pays more for drugs than they do.

Healthcare